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November 14, 2010

Update FOREX pair EUR/USD: Nov.13,2010.

No further up move the past week. The bearish engulfing pattern we had at the end of the previous week was confirmed on Monday with a large down move. Also the rest of the week was correction time. SATS5 gave a selling signal on Tuesday. September 14 we bought at 1.2987, closing Tuesday at 1.3764 gives a profit of 777 PIPS.

Since I still have the feeling that the up move is not finished yet, I was looking for a new Elliott count. I think that we are now making a correction wave 4 (green) and that this correction will be followed with another move up tot the level of 1.455. With the idea that this is a limited wave 4 correction I did not open a new short position. Price is now touching the lower side of the up moving pitchfork, the lower side of the Bollinger bands and the 50 day moving average. This should be sufficient support to turn price up again. I will anyway wait for a new long position until there is sufficient proof of price turning back up. Looking at the weekly chart it is difficult to make a good prediction for next week.

The SATS5 expert function is red. The long position is closed with a profit of 777 PIPS. There is no new short position because I expect only a limited wave 4 correction down.

Weekly Chart: closing price falls below the 200 week average finding support on the 50 and 100 moving average. Volume is high in this correction move down. All indicators are topping. We can not exclude a further longer term down move. However, I expect for the moment a further consolidation move with only a limited down correction and finally a further up move to 1.455. It is clearly difficult to make a prediction for the moment. The weekly SATS5 is green.

Monthly Chart: October 30, 2010: The Euro made a long term top Elliott wave [5] around $1.60 July 2008. A correction wave [A] was started, retracing almost 50% of the complete up move. Next the correction wave [B] retraced a big part of the [A] wave, before starting the [C] wave down. This [C] wave made already a lower low than wave [A] and bounced up from the 50% retracement level and the 200-month moving average. The question is if the lowest level has been reached at that point. After an up correction now, we may have an extension of the [C] wave down with a wave {C} to the level of correction wave [4] of the long term up move. But we must not exclude that the lowest point has been reached already at the level now marked as wave {A} and that the EUR/USD started a new long term up move. The long term SATS5 expert is green for an open long position, is breaking the 50 month average and reaches the median line of the up moving pitchfork with high volume. All indicators have a lot of room for a further long term up move.